What is the cause of high cyber insurance claims? |Insurance Business America Cyber What is the cause of high cyber insurance claims?
Global Cyber Claims Officer Provides Insights
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Written by Terry Ganquanco
Large cyber insurance claims (over €1 million) have increased in both frequency and severity in the first half of the year, with two-thirds of losses made up of elements related to data and privacy breach incidents .
According to Allianz Commercial’s latest Cyber Risk Outlook, the frequency of major cyber litigation increased by 14% year-on-year and the severity increased by 17% in the first half of 2024. Class action lawsuits, particularly in the United States, are driving up costs. For companies involved in privacy violations.
Michael Daum (pictured), global head of cyber claims at Allianz Commercial, said the growing importance of data breach losses in cyber claims is driven by several notable trends. Ta.
“The increase in ransomware attacks, including data theft, is the result of changing attacker tactics and increased interdependence between organizations, who share ever-larger amounts of personal records,” he noted.
According to Daum, the rate of such non-assault claims has tripled in value in just two years.
“In the United States, data privacy violation claims are on the rise, and class action lawsuits against large U.S. and international companies related to privacy violations such as consent and data use are on the rise,” Daum said. and emphasized the importance of these legal battles. It can be more costly than a ransomware incident.
According to statistics from law firm Duane Morris, more than 1,300 data privacy-related lawsuits were filed in the United States in 2023, more than double the number in 2022. Notably, the 2023 MOVEit data breach resulted in over 240 lawsuits that were subsequently consolidated. When an incident occurs, large legal costs can be incurred.
Meanwhile, the increasing use of artificial intelligence in various sectors is expected to further change the cyber and privacy risk landscape. AI’s reliance on vast datasets, including personal, health, and biometric information, is particularly important when tools such as chatbots are poorly managed or companies fail to secure proper consent for data processing. This creates new risks for breaches and privacy violations if the data is not present.
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